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Yes, the fundamental problem is that there is a strong feedback loop between capital and income, so that the more capital is accumulated, the more it produces i

Yes, the fundamental problem is that there is a strong feedback loop between capital and income, so that the more capital is accumulated, the more it produces income. In practical terms, it means that the rich can not only buy rewards for the work they've put in, they can also buy opportunities for additional income---opportunities that poorer people could've won with hard work but now are no longer available. This feedback loop is exacerbated by a lot of factors, including things like cronyism and winner-take-all digital markets, but the fundamental problem is intrinsic to capitalism.

simonh 5y ago
>the fundamental problem is that there is a strong feedback loop between capital and income... As long as that capital is devoted to productive activities, such as investment in a company that employs people, or equipment that had to be manufactured and is used productively, I've no problem with that. None of those economic functions could have been substituted by labour, it took capital to do it, and in fact those activities promote and reward labour. So we need to incentivise productive uses of capital, and tax unproductive uses. What's important is that capital is mostly used to benefit society, and capitalism has proved incredibly good at doing that efficiently.
- vannevar 5y ago
  >So we need to incentivise productive uses of capital, and tax unproductive uses. I would agree that this would probably improve the situation, yes, as long as the concentration of wealth isn't leveraged to drive wages down. >What's important is that capital is mostly used to benefit society, and capitalism has proved incredibly good at doing that efficiently. However productive the economy becomes, if its fruits are not shared more widely than they are today, it won't benefit society as a whole in the long run. In the last 40 years overall productivity has boomed, but the wealthy have grabbed a wildly disproportionate share of the resulting economic growth simply because their disproportionate share of capital gives them the leverage to do so.

simonh 5y ago

>the fundamental problem is that there is a strong feedback loop between capital and income... As long as that capital is devoted to productive activities, such as investment in a company that employs people, or equipment that had to be manufactured and is used productively, I've no problem with that. None of those economic functions could have been substituted by labour, it took capital to do it, and in fact those activities promote and reward labour. So we need to incentivise productive uses of capital, and tax unproductive uses. What's important is that capital is mostly used to benefit society, and capitalism has proved incredibly good at doing that efficiently.

vannevar 5y ago
>So we need to incentivise productive uses of capital, and tax unproductive uses. I would agree that this would probably improve the situation, yes, as long as the concentration of wealth isn't leveraged to drive wages down. >What's important is that capital is mostly used to benefit society, and capitalism has proved incredibly good at doing that efficiently. However productive the economy becomes, if its fruits are not shared more widely than they are today, it won't benefit society as a whole in the long run. In the last 40 years overall productivity has boomed, but the wealthy have grabbed a wildly disproportionate share of the resulting economic growth simply because their disproportionate share of capital gives them the leverage to do so.